The intestinal epithelium is continually exposed to a high concentration of diverse bacteria. In spite of the density of commensal bacteria, the normal intestine is not inflamed. Idiopathic inflammatory bowel disease in humans and animals is characterized by aberrant host-microbial interactions. We wished to understand the mechanism by which the normal epithelium guards against chronic inflammation in the presence of commensal flora and thus understand how this may be perturbed in idiopathic inflammatory bowel disease. Gut commensal flora consists of mixed gram-positive and gram-negative organisms. The cell wall of gram-negative bacteria contains lipopolysaccharide (LPS), a potent pro- inflammatory molecule. Cellular responses to LPS are mediated by the interaction of LPS with toll-like receptor 4 (TLR4) and transduced via the IL-1 receptor signaling complex to activate NF-kappaB and pro- inflammatory cytokine secretion. Recent data demonstrate that a novel, secreted protein MD-2, is required for TLR4 function. We hypothesize that the TLR co-receptor MD-2 is normally down-regulated in intestinal epithelial cells limiting pro-inflammatory gene expression in the presence of LPS. We further hypothesize that TLR co-receptor MD-2 is normally down-regulated in intestinal epithelial cells limiting pro- inflammatory gene expression in the presence of LPS. We further hypothesize that increased expression of MD-2 in response to Th1 cytokines perpetuates bacterial hyper-reactivity in inflammatory bowel diseases. We have recently described that intestinal epithelial cells are unresponsive to purified, protein-free LPS as measured by NF-kappaB activation and IL-8 secretion (Abreu et al. 2001). LPS unresponsiveness is due to low expression of TLR4 and MD-2. Preliminary data demonstrate that MD-2 is not expressed by human intestinal epithelial cells in vivo. Th1 cytokines increase expression of MD-2 and restore LPS responsiveness in intestinal epithelial cells. Cloning of the MD-2 promoter demonstrate that MD-2 is transcriptionally regulated by IFN- gamma via the STAT pathway. In this proposal, we will explore the molecular mechanisms by which MD-2 is transcriptionally regulated in intestinal epithelial cells. Specifically, we will characterize the mechanisms that repress MD-2 transcription normally and those leading to its up-regulation in response to inflammation. Finally, we will define the functional consequences of MD-2 regulation in toll receptor signaling in intestinal epithelial cells. The results of our studies have important implications for understanding host-microbial interactions and the interactions and the inter-relationship between the innate and adaptive immune systems in the gut.